One of the age-old questions when it comes to real estate investment is: to buy, or to rent. This question is particularly important to prospective first-time home buyers, and to current homeowners considering right-sizing their living situation. It’s also particularly timely in periods of high interest rates, like we’re in now - is it better, some renters may ask themselves, to continue renting for another year or two to give interest rates a chance to drop (see our thoughts on this topic here). 

Unfortunately, there’s no one-size-fits-all answer. The decision of whether to buy a home, and when, is influenced by countless personal factors. However, by carefully weighing the pros and cons of each path and thinking critically about what you value the most, you can figure out the best answer for you and your family.

Pros & Cons of Buying a Home

Pros:

• Building Equity: With each mortgage payment, you build equity in your home - and eventually, you’ll pay that mortgage off and own the property free and clear. It’s never a guarantee, but in Johnson County it’s a pretty safe bet that your home will appreciate in value over time, making the equity you build greater than the sum of your cash payments. 
• It’s All Yours: As a homeowner, you’re free to improve and customize your home to your heart’s content - with a can-do attitude and the right tools, you could be just a weekend away from a whole new look or feature that will make your home feel more, well, homey. 
• Stability: When you own your home, you avoid pesky rent increases, and no one can ask you to leave.

Cons:

• Expenses: It’s not cheap to buy a home. You’ll need cash for a down payment, closing costs, and moving expenses. Don’t be intimidated, though - there are ways to move forward with a home purchase that don’t cost an arm and a leg. 
• It’s All Yours: Here’s the other side of the coin - as a homeowner, if something breaks, leaks, smells, or makes a weird noise, you can’t just submit a maintenance request. In these situations, it may be harder to muster that can-do attitude (but it can still yield a similar feeling of satisfaction when the job is done). 
• Commitment: If your living situation needs to change quickly, you may have to sell your house and buy a new one. Due to market fluctuations, it’s never a sure thing that this will happen on an ideal timeline or at an ideal price. However, it’s not always easy to get out of a lease early, either, so it’s important to be realistic about scenarios that require a move.

Pros & Cons of Renting a Home

Pros:

• Flexibility: Renting can offer a great option for those whose longer-term futures are less clear - for example, young professionals open to opportunities in other markets, or people who want to live in a specific neighborhood for awhile, but not forever. 
• Amenities: Many apartment and rental communities offer gyms, pools, and other perks that would require a separate membership as a homeowner. 
• No Maintenance: Perhaps the most appealing aspect of renting - if something breaks, you’re not on the hook for it (although you may need to pester maintenance to get it resolved). 

Cons:

• No Equity: When you make your rent payment, it’s gone - it doesn’t build any equity. 
• Less Stability: In the rental market, you’re subject to rent increases, and could even be forced to move if your landlord decides not to renew your lease. Homeownership has its own unpredictable cost increases - property taxes and insurance costs can go up, for instance - but your payments still build equity. 
• Wild Card Properties: As a renter, you’re subject to your landlord or property management company, regardless of how reasonable or unreasonable they are. Renters often experience slow turnaround on maintenance issues, lack of enforcement of community standards, and other inconveniences. Homeownership can certainly present its own challenges, but an inspection is generally conducted prior to move-in as a part of the contract process.

Consider What You Value Most

The key to the renting vs. buying conundrum is to drill down to what you value most.

• If it’s things like convenience, flexibility, and short-term cost, renting may be the best decision.
• If long-term value, appreciation of wealth, and creative freedom appeal to you most, then homeownership may be the ideal path. 

Our Two Cents

We think homeownership is something to aspire to, both for its lifestyle benefits and for its utility as a wealth-building tool. That said, buying at the right time and under the right circumstances is important - it’s not a decision to rush into. 

If you’re on the fence about buying or renting, we’d love to meet you and discuss the process with you. You may be surprised at how affordable buying a home is, and how many lifestyle boxes it checks for you. But you may also decide now isn’t the right time - and that’s perfectly fine too.